Lenders to stop 'family assessments'

THE credit industry has agreed to stop using information on an individual's family when assessing whether to lend them money, it has emerged.

The vast majority of lenders have said they will no longer be using third-party information by 31 October, the Information Commissioner's Office said.

At present lenders are able to access the credit history of other people living in the applicant's household with the same surname, such as a partner or adult children, when considering a credit application.

However, from November this year, the majority of lenders will look at only the credit history of the individual applying for the loan, credit card or mortgage, and anyone who is financially linked to them, for example through a joint account or joint mortgage.

Some lenders will also give individuals the option to be assessed in their own right, without looking at financial data on their partner.

The new system will also end the problem of people who send off for their credit file being able to see information relating to other members of their family.

The Information Commissioner has been involved in discussions with the industry over the issue since 2000.

Richard Thomas, the Information Commissioner, said: 'I recognise that many practical issues have had to be addressed and substantial investment made by the industry.

'But any companies in the credit industry still without a firm timetable for implementing the new requirements should reflect very carefully on their position.'

Credit rating agency Experian welcomed the move.

Director of consumer relations Jill Stevens said: 'The firm deadline is great news and should be welcomed by consumers and lenders.

'The credit industry is confident of reaching the October deadline, and Experian has been working closely with the Information Commissioner's Office, lenders and other members of the credit industry to make this change.'